Reverse for purchase
Buy the right-sized home without taking on a payment.
Published Updated By Ramin Hallaji, mortgage broker
A reverse mortgage for a home purchase, for buyers 55 and over in British Columbia and Alberta: pair your down payment with a reverse advance on the new home, and right-size without a monthly mortgage payment following you in.
What it is, and who considers it
A reverse mortgage for purchase is the same product as a reverse mortgage on a home you already own, registered on the home you are buying instead. The lender advances a share of the new home's value, set by your age, the property and its location. You bring the rest on closing day, usually from the sale of the previous home. Nothing is owed month to month; interest is added to the balance and the whole amount is repaid when the home is sold or the last borrower moves out.
It exists for one situation: the next home costs more than you want to pay in cash, and a conventional mortgage either will not qualify on retirement income or would put a payment back into a budget that just got rid of one.
- Downsizers whose smaller home in the right neighbourhood still costs more than the sale leaves in hand
- Couples moving closer to children and grandchildren, where the move matters more than the estate
- Retirees who want to keep a reserve invested or in the bank instead of putting every dollar into the next house
- Buyers on pension income who would not pass the stress test for a conventional mortgage, or do not want a payment at all
How the purchase version works
1. Sell (or keep) the family house
Most purchase files start with a sale: the equity from the old home becomes your down payment on the next one. Keeping the old home is possible too, if the numbers carry it.
2. The reverse advance covers the rest
Instead of a conventional mortgage with a monthly payment, a reverse mortgage on the new home tops up your down payment, sized by your age, the property and its location.
3. Move in, keep your cash, skip the payment
You own the new home, you keep more of your sale proceeds in the bank, and there is no required monthly payment. The loan is repaid when you eventually sell or leave.
How the money fits together
A hypothetical file, with round numbers. The next home is $800,000. The younger of you is 70. At that age the lenders we place typically advance 22% to 46% of the home's value; at the midpoint, 34%, the advance is $272,000.
| Advance at 70 | Lender advances | You bring |
|---|---|---|
| 22% (low end) | $176,000 | $624,000 |
| 34% (midpoint) | $272,000 | $528,000 |
| 46% (high end) | $368,000 | $432,000 |
Say the family house nets $1,000,000 after commission and legal. At the midpoint, $528,000 goes into the new home and $472,000 stays in your hands, less the closing costs on the reverse mortgage itself (set-up fee, appraisal and independent legal advice, itemized on what it costs). Run your own ages and price in the calculator.
Advance ranges: the CHIP (HomeEquity Bank) and Equitable Bank table, confirmed by Ramin Hallaji on September 27, 2026. The lender's offer on a real file can sit anywhere in the band, or outside it for an unusual property.
Buying versus refinancing: what changes
- The home is valued before you own it. On a refinance the lender appraises the home you live in. On a purchase it values the home you are buying, and the advance is a share of that valuation, not necessarily of the price you agreed to pay.
- There is a closing date. A refinance can wait for the right week; a purchase closes when the contract says. The approval, the appraisal and the legal work all have to land before that day, which is why the lender's number is confirmed before you shop.
- Two homes can be in play at once. If the sale and the purchase close on different days, the gap is bridged separately; we plan the sequence so the reverse mortgage is registered on the right home on the right day.
- Everything else is the same. Age sets the advance, no monthly payment is required, interest compounds, you stay the owner, and the lender's no-negative-equity guarantee applies on the same terms as any reverse mortgage.
Closing, step by step
Step 1
Before you shop
We confirm the advance a lender would offer on the kind of home you are looking at: your ages, the price range, the area. That number is your budget's ceiling, and you know it before you write an offer.
Step 2
The offer
A financing condition protects you while the lender appraises the home and approves the file. The advance is set on the lender's valuation of the home you are buying, so a price above that valuation is covered by you, not by the loan.
Step 3
Appraisal and legal advice
The lender orders an appraisal. Every borrower takes independent legal advice, which the lenders require on every reverse file, and your own lawyer handles the purchase.
Step 4
Closing day
The lender advances its share, you bring the balance and the closing costs, the lawyers register the reverse mortgage on the new home, and you move in. From then on, no monthly payment.
The rules the lenders publish
- Age
- Everyone on title 55 or older; the advance is sized to the younger age.
- Residence
- Your principal residence, lived in at least six months of the year (Equitable Bank's wording). Not a cottage, a secondary home or a modular home.
- Property
- Detached, semi-detached, duplex, row house, townhouse or condo qualify at Equitable Bank; each lender has its own list, checked before you offer.
- Location
- The larger urban centres of BC and Alberta. Each lender limits its lending area, so a rural or resort address is confirmed first.
- Minimum value
- $250,000, published by Equitable Bank, Bloom Finance and Home Trust.
- How much
- Up to about 55% of the home's value at the oldest ages (Equitable Bank publishes up to 59%, Home Trust up to 60% of equity). At 70, typically 22% to 46%.
Lender rules change. Read from each lender's own page on the dates below, and confirmed again on your file before anything is relied on.
The equity you keep
- Interest still compounds. No payment does not mean no cost. The balance grows unless you choose to pay the interest monthly, and the year-by-year math is worth reading before you decide.
- The rest of the home stays yours. When the home is sold, the balance is repaid and everything above it goes to you or your estate. If the balance ever caught up with the value, the lender's no-negative-equity guarantee means neither you nor your estate owes the difference, as long as the mortgage's obligations were kept.
- Closing costs apply: a set-up fee, the appraisal and independent legal advice, like any reverse file, plus your purchase lawyer and property transfer tax where it applies.
- A conventional mortgage might still win. If your income qualifies comfortably, we price that option too and show you both, in writing.
Or buy the next home with cash only
The honest alternative is to downsize far enough that the sale covers the next home outright, with no reverse mortgage at all. It costs nothing in interest and leaves the estate whole; it also means a smaller or further-away home, and every dollar of the proceeds goes into it. Our reverse versus downsizing comparison puts the two side by side, commission, transfer tax and moving costs included, and the alternatives page covers the rest. Tell us which matters more, the neighbourhood or the estate, and the answer usually follows.
Questions buyers ask
Can a reverse mortgage really be used to buy a home?
Yes. All four reverse lenders we place, HomeEquity Bank (CHIP), Equitable Bank, Bloom Finance and Home Trust, write reverse mortgages on a purchase. The lender sets the advance on the home you are buying, from your age, the property and its location, exactly as it would on a home you already own. The purchase price less that advance is what you bring on closing day, usually from the sale of the previous home. There is no monthly payment on the reverse mortgage; the balance is repaid when the home is sold or the last borrower moves out.
How much of the price do I have to bring myself?
Everything the advance does not cover, plus closing costs. At 70, the lenders we place typically advance 22% to 46% of the home's value, so on an $800,000 home you would bring between $432,000 and $624,000 of your own money. Younger buyers bring more, older buyers less, because the advance rises with age.
Do both of us have to be 55?
Everyone going on title has to be 55 or older. Equitable Bank, Bloom Finance and Home Trust each publish that rule, and the advance is sized to the younger age. A buyer under 55 cannot be added to title to make the purchase work.
Does the new home have to be my principal residence?
Yes. The lenders require an owner-occupied principal residence; Equitable Bank says you must live there at least six months of the year. A detached house, condo, townhouse, duplex, row house or semi-detached qualifies at Equitable Bank; modular homes, cottages and secondary homes do not. Each lender also limits where it lends, generally the larger urban centres of BC and Alberta, so the location is checked before anything is offered on.
Is there an income test or a stress test?
No monthly payment is required, so there is no payment to qualify for. Equitable Bank puts it plainly: eligibility is based on your age, location and property value. That is the whole reason this route exists for a buyer whose pension income would not pass the stress test on a conventional mortgage.
What if the home I want is under $250,000?
The reverse lenders we place publish a minimum home value of $250,000 (Equitable Bank, Bloom Finance and Home Trust all state it). Below that, a reverse mortgage on the purchase is not available and we would look at the alternatives with you instead.
Sources, read on the dates shown: Equitable Bank, reverse mortgage eligibility (October 14, 2026); Bloom Finance, lending criteria (October 14, 2026); Home Trust, reverse mortgage (October 14, 2026); HomeEquity Bank (CHIP), cost pages (October 1, 2026). We place five lenders. All four reverse lenders among them (HomeEquity Bank (CHIP), Equitable Bank, Bloom Finance and Home Trust) write a reverse mortgage on a purchase, confirmed by Ramin Hallaji on October 14, 2026; which property each will lend on is confirmed on your file.
Thinking about the next home?
Tell us the home you are eyeing, your ages, and your down payment. We will show what a reverse-for-purchase covers, what a conventional mortgage would cost instead, and our honest recommendation, in writing.
In a hurry? Answer seven quick questions and Ramin calls you with your figure. About 3 minutes, no obligation.
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